Oil prices rise after upbeat US China data
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NEW YORK, Feb 1 AFP
February 02 2013, 08:47AM
Oil prices finished higher on Friday in New York, buoyed by greater optimism about global growth following encouraging indicators from the US and China.
A barrel of West Texas Intermediate, the US benchmark, settled 28 cents higher at $97.77 on the New York Mercantile Exchange.
Even stronger was the price of European oil benchmark Brent futures, which closed at $116.76 a barrel on the Intercontinental Exchange, up $1.21. The close was Brent's highest level since May 2012.
Oil prices got a lift from Friday's monthly US nonfarm labour payroll data.
Although the number of net jobs added in January came in below expectations, markets were heartened by a significant upward revision in the 2012 monthly figures.
The Labor Department reported employers added 157,000 jobs in January and upped its estimate for December jobs growth to 196,000.
After a sweeping annual revision of earlier data, the department also said monthly job growth averaged 181,000 in 2012, well above the prior estimate of 153,000 jobs.
The US jobs report was not the only strong data point released Friday, said Dominick Chirichella, an analyst with the Energy Management Institute. There was also strong manufacturing data in the US and China, the world's two biggest energy consumers.
"Pretty much everything across the board was positive," Chirichella said.
The one exception was Wednesday's report on the US economy for the 2012 fourth quarter, which showed gross domestic product shrank 0.1 per cent, the first contraction since the 2009 recession.
But the oil and equity markets "ignored" the GDP reading, Chirichella added.
"Crude is being lifted with all the other markets, even though the underlying fundamentals do not necessarily justify that," said Matt Smith, an analyst with Schneider Electric. "Demand is relatively flat and supply is at a 20-year high."
Oil prices have also been supported by the fall in the dollar against the euro. Because oil is traded in dollars, it becomes cheaper for consumers who use other currencies to purchase the commodity.
Still, prices of US benchmark WTI continued to be weighed down by problems at the Seaway pipeline.
The pipeline has encountered operational problems that have limited the flow of oil from the Cushing, Oklahoma-based trading hub to refineries on the US Gulf Coast, producing a glut of oil at landlocked Cushing that has pressured prices.